Here at Kit, we designed our pocket money Earn functionality with kid’s financial capability at
the heart. As a result, we chose to deliberately create a regular allowance structure, rather
than build jobs that could be paid for ad hoc.
- Here’s how a regular PayDay could help you build your child’s financial capability:
Walter Mischel, the psychologist behind the Stanford Marshmallow Experiment,
conducted research that shows that children who can delay gratification are more
likely to have higher savings, better credit scores, and lower debt levels in
adulthood1. Delayed gratification is like a muscle - the more you exercise it, the
stronger it gets. Having a regular pay structure means children are regularly
practising waiting and being rewarded at the end.
- Having a regular PayDay can encourage more frequent conversations about
money (which are shown to directly build financial capability), by providing a regular
'moment' where you can share your own money reflections, as well as celebrate what
your little grownup has earned (or reflect on what was tricky if not). Encouragement
helps your child build self-efficacy and a positive attitude toward money.
- A consistent pay structure helps your child to build skills in budgeting (and kids
learn by doing). A regular source of pocket money means regular decision-making on
whether to spend or save, and the ability to set savings goals and plans (e.g. save $5
a week). If they are short of money, they need to wait until the next pay period before
they have more to spend - and that is a valuable lesson. Younger children can start
with a weekly schedule, but as they become teenagers, you can extend it to
fortnightly, and then monthly. Before you know it, they are budgeting larger amounts
over longer time periods, just like adults.
We know that some parents want to pay children instantly for jobs done around the house.
Kit supports instant payments through PayTo so as the Boss, you can make the right choice
for your family.
1 Shoda, Y., Mischel, W., & Peake, P. K. (1990). Predicting adolescent cognitive and self-
regulatory competencies from preschool delay of gratification: Identifying diagnostic
conditions. Developmental Psychology, 26(6), 978–986.
https://doi.org/10.1037/0012-1649.26.6.978
Also:Chabris CF, Laibson D, Morris CL, Schuldt JP, Taubinsky D. Individual laboratory-measured
discount rates predict field behavior. J Risk Uncertain. 2008 Dec 1;37(2-3):237-269. doi:
10.1007/s11166-008-9053-x. PMID: 19412359; PMCID: PMC2676104.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2676104/
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